Originally created 12/28/06

Lawmaker wants rebates to cease



ATLANTA - Companies providing health care to more than a million Georgians on the state's Medicaid and PeachCare programs should not be allowed to use taxpayer money to generate rebates from drug companies, a Savannah lawmaker says.

Republican Rep. Ron Stephens has filed a pair of bills dealing with the topic for next year's legislative session, which begins Jan. 8.

The first would require any managed-care organization that receives rebates for Medicaid or PeachCare patients it covers to give the money to the state. The other would require the companies to disclose any rebates they received.

PeachCare is a joint state-federal program for children whose families make too much to qualify for Medicaid but not enough to afford most private insurance plans.

The issue arises from a provision in the state's contract with the managed-care organizations that allows them to negotiate with the drug companies, then pocket the rebates.

Mr. Stephens said some companies could use their ability to put the drug companies' products on their preferred drug lists as leverage to get the rebates.

"Public money should not be involved in kickback schemes to private companies for profit," said Mr. Stephens, a pharmacist.

He has been a consistent critic of the way Medicaid and PeachCare moved Georgia patients to the managed-care organizations.

But state officials involved in the managed-care changeover said that the drug companies are doing what the state intended for them to do and that Mr. Stephens' bills could force the state to renegotiate the Medicaid and PeachCare contracts.

Mark Trail, the state's Medicaid director, said the state took the rebates it once collected into account when it drew up the contracts with the managed-care providers.

"Basically, we took the rebates up front," he said.

Reach Brandon Larrabee at (404) 681-1701 or brandon.larrabee@morris.com.